Chemical Stock Earnings Due On Nov 7: APD, ESI, TROX & ICL
Zacks Investment Research | Nov 05, 2019 08:28PM ET
A few companies in the chemical space are lined up to report their quarterly numbers on Nov 7. Demand weakness, faced by chemical companies in Q3, may affect results. Trade conflict has led to a slowdown in industrial activities across Asia and Europe, hurting demand for chemicals and plastics.
Specifically in China, chemical makers are seeing soft demand due to a sluggish economy. The automotive market (a major chemical end-use market) over there has slowed considerably owing to the trade tiff.
Chemical companies are also facing headwinds from raw material cost inflation. Q3 results are expected to continue reflecting the impact of input cost inflation, albeit to a lesser extent than what was witnessed during the first half of 2019.
However, these companies are benefiting from strategic measures, including cost-cutting and productivity improvement, and actions to raise selling prices. A number of companies have been taking aggressive price increase actions in the wake of raw material cost inflation. Chemical companies also remain actively focused on acquisitions to diversify and drive growth. Benefits of these initiatives might reflect on their Q3 results.
Per the Zacks industry classification, the chemical industry falls under the broader Air Products to Post Q4 Earnings: What's in the Offing? )
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Element Solutions beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missed once and delivered in-line results on the other occasion. In this timeframe, the company delivered an average negative surprise of roughly 4.3%.
The Zacks Consensus Estimate for Q3 revenues is currently pegged at $478 million, suggesting a decline of around 2.2% year over year. Moreover, the Zacks Consensus Estimate for earnings currently stands at 21 cents.
The company’s Q3 results are likely to bear the brunt of sustained pressure from the trade conflict, weakness in automotive business and slowdown in industrial production. However, it is likely to have benefited from new product launches and cost-management actions.
Tronox Holdings plc (NYSE:TROX) will report Q3 results after the bell. Our proven model does not conclusively predict that the company is likely to beat the Zacks Consensus Estimate this quarter. This is because it has an Earnings ESP of -7.96% and a Zacks Rank #3.
The company posted better-than-expected results in two of the last four quarters while missed twice. The average earnings surprise is negative 51%.
The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $819 million, reflecting a rise of 79.5% from the year-ago quarter. The Zacks Consensus Estimate for earnings is currently pegged at 15 cents.
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Benefits of the company’s cost-reduction actions and synergy savings coupled with strength in its TiO2 pigment business are expected to get reflected on its Q3 performance. However, demand weakness for zircon due to uncertainties in China amid trade tensions is likely to affect results.
Israel Chemicals Ltd. (NYSE:ICL) will report Q3 results ahead of the bell. Our proven model does not conclusively predict an earnings beat for the company this time around. This is because it has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).
The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, at an average positive surprise of around 12.8%.
The Zacks Consensus Estimate for Israel Chemicals’ Q3 earnings is currently pegged at 9 cents.
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